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Orange Transportation Services, Inc. v. Volvo Group North America, LLC

United States District Court, W.D. New York

January 15, 2020

ORANGE TRANSPORTATION SERVICES, INC., Plaintiff,
v.
VOLVO GROUP NORTH AMERICA, LLC, Defendant.

          DECISION AND ORDER

          HON. FRANK P. GERACI, JR. CHIEF JUDGE

         INTRODUCTION

         Plaintiff Orange Transportation Services, Inc. brought this action against Defendant Volvo Group North America, LLC for breach of warranty, fraud, breach of the duty of good faith and fair dealing, and violation of New York law. ECF No. 1. Now before the court is Volvo's motion to dismiss Orange Transportation's Complaint pursuant to Federal Rules of Civil Procedure 9(b), 12(b)(1), and 12(b)(6). ECF No. 7; ECF No. 7-3 at 1. Volvo's motion to dismiss Orange Transportation's Complaint, ECF No. 7, is GRANTED IN PART and the remainder is held in abeyance. Orange Transportation is ORDERED TO SHOW CAUSE as to why the Court should not dismiss the remainder of its Complaint sua sponte for lack of subject matter jurisdiction.

         RELEVANT FACTS

         Orange Transportation claims diversity jurisdiction under 28 U.S.C. § 1332. ECF No. 1 ¶ 8. Orange Transportation hauls freight long distances and is a South Carolina corporation with its principal place of business in New York. See id ¶¶ 9, 34. Orange Transportation alleges, “[u]pon information and belief, ” that Volvo is a Delaware corporation with its principal place of business in North Carolina. Id. ¶ 10; see also Id. ¶ 15 (alleging Volvo is a Delaware corporation registered to do business in New York). Volvo manufactures, markets, and sells “Class 8” trucks (“semi- trucks”) in the United States. Id. ¶¶ 18, 19. It is currently the largest semi-truck manufacturer in North America. Id. ¶ 19.

         Orange Transportation allegedly purchased twenty-four semi-trucks from Volvo on October 9, 2014. Id. ¶¶ 28, 35. Volvo delivered the semi-trucks to Orange Transportation in early 2015. Id. ¶ 35. Orange Transportation allegedly notified Volvo's representatives as it placed each truck in service so that Volvo could register the warranty. Id. ¶ 35. Orange Transportation claims the semi-trucks had defects resulting in significant malfunctions and lost revenue. Id. ¶¶ 1, 29, 30. Orange Transportation asserts claims against Volvo for breach of express warranty, breach of implied warranty of merchantability, common law fraud, breach of the duty of good faith and fair dealing, and violation of New York consumer protection law. Id. ¶¶ 77-127.

         Volvo alleges that eighteen of the semi-trucks at issue were not in fact purchased by Orange Transportation and argues that Orange Transportation lacks standing with respect to those trucks. ECF No. 7-3 at 4. Volvo submitted documents produced by Orange Transportation as part of the parties' pre-suit discussions: invoices for the sale of Volvo trucks, note and security agreements, and vehicle title acknowledgements. ECF No. 7-1; ECF No. 12 (filed under seal). The invoices appear to reflect Orange Transportation's purchase of six “2016 Volvo Model VNL64T” semi-trucks from a third party, Buffalo Truck Center, Inc. ECF No. 12. Separate invoices reflect Dallas Logistics, Inc.'s purchase of eighteen of the same model semi-trucks from Buffalo Truck. Id. Ex. A.

         Volvo submitted three note and security agreements and associated vehicle title acknowledgements, one each between Banc of America Leasing & Capital, LLC and (1) Orange Transportation, (2) Dallas Logistics, and (3) Logic Incorporated respectively. Id. Exs. B-D. The Orange Transportation note appears to reflect a security interest in the six semi-trucks Buffalo Truck sold to Orange Transportation (based on the VIN No. for the vehicles), and the associated title acknowledgement reflects Orange Transportation's obligation to provide Banc of America certificates of title for the semi-trucks noting Banc of America's security interest. Id. Ex. B. The notes and associated title acknowledgements for Dallas Logistics and Logic Incorporated are substantively similar but relate to seventeen of the eighteen semi-trucks Buffalo Truck sold to Dallas Logistics (six of which are associated with the Logic Incorporated documents and the remaining eleven with the Dallas Logistics documents). Id. Exs. C, D. A warranty bill of sale included with the Logic Incorporated note shows the sale of six of the semi-trucks from Dallas Logistics to Logic Incorporated. Id. Ex. D.

         Orange Transportation claims that it is affiliated with Dallas Logistics and Logic Incorporated and that both entities assigned “their rights to [Orange Transportation] to simplify this litigation.” ECF No. 15 at 1. Orange Transportation has not submitted any evidence in opposition to Volvo's motion.

         LEGAL STANDARD

         A federal district court is “‘of limited jurisdiction' w[ith] powers . . . confined to statutorily and constitutionally granted authority.” Blockbuster, Inc. v. Galeno, 472 F.3d 53, 56 (2d Cir. 2006) (quoting Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 552 (2005)). “The Supreme Court has made clear that a court should not assume ‘hypothetical jurisdiction' over a case for purposes of adjudicating the merits when its jurisdiction is ‘in doubt,' because to do so would ‘carr[y] the courts beyond the bounds of authorized judicial action.'” In re Facebook, Inc., 797 F.3d 148, 155 (2d Cir. 2015) (quoting Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 94 (1998) (alterations in Facebook)). For the Court to have subject matter jurisdiction here, Orange Transportation must have constitutional standing and the Court must have statutory jurisdiction over the dispute.

         I. Standing

         “Article III, § 2, of the Constitution extends the ‘judicial Power' of the United States only to ‘Cases' and ‘Controversies.'” Steel Co., 523 U.S. at 102. Accordingly, this Court has “an obligation to assure [itself] of litigants' standing under Article III.” DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 340 (2006) (internal quotation omitted). A plaintiff must “have suffered (1) a concrete, particularized, and actual or imminent injury-in-fact (2) that is traceable to defendant's conduct and (3) likely to be redressed by a favorable decision.” Amidax Trading Grp. v. S.W.I.F.T. SCRL, 671 F.3d 140, 145 (2d Cir. 2011) (quotations omitted).

         Even if a party sufficiently establishes “injury-in-fact to satisfy Article III of the Constitution, ” the Supreme Court has established prudential standing limitations. Hodel v. Irving, 481 U.S. 704, 711 (1987). One such limitation is that a “plaintiff generally must assert his own legal rights and interests.” Id. Like Article III limitations on standing, prudential limitations are “a prerequisite to federal subject matter jurisdiction.” Wright v. BankAmerica Corp., 219 F.3d 79, 89 (2d Cir. 2000). To successfully oppose a motion to dismiss, the plaintiff must “clearly . . . allege facts demonstrating that [they are] a proper party to ...


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